Paul, Weiss is widely recognized as having one of the nation’s preeminent securities litigation and regulatory practices. For two decades, our lawyers have guided global corporations and financial institutions through a series of “bet-the-company” securities-related crises, consistently reducing or eliminating their most damaging claims and negotiating favorable resolutions.
ADT Wins Dismissal of Securities Suit
- Client News
- June 3, 2015
Practices
The U.S. District Court for the Southern District of Florida dismissed a consolidated securities action against Paul, Weiss client The ADT Corporation and Naren Gursahaney, ADT's President and CEO, as well as defendants Kathryn Mikells, ADT's former CFO; Corvex Management LP, a hedge fund that previously held approximately five percent of ADT's outstanding common stock; and Keith Meister, Corvex's founder and principal.
The consolidated securities complaint, filed on August 11, 2014, alleged that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 for alleged misrepresentations and omissions relating to, among other topics, ADT's share repurchase program, the alleged effect of competition on ADT's rate of customer addition and attrition, the impact of alleged customer service problems on ADT's business, ADT's plans and intentions with respect to its target leverage ratio, and the ADT board's alleged motivation to entrench itself in office in response to a hypothetical threat posed by Corvex.
The district court dismissed the complaint, holding that plaintiffs failed to identify any material omissions or materially misleading statements and also failed to plead scienter on the part of any defendant. The district court concluded that none of the defendants' challenged statements were materially false or made with actual or presumed knowledge of falsity, in part because plaintiffs' confidential witnesses were "lower-level employees" who did not provide any basis to conclude that any of the challenged statements were knowingly false or even inaccurate. The district court also rejected plaintiffs' allegations concerning the defendants' alleged entrenchment motivation as based upon "mere conjecture" and without factual support. Because no primary violation of Section 10(b) was pled, the district court also dismissed plaintiffs' Section 20(a) claim.
The Paul, Weiss team included, among others, litigation partner Daniel Kramer and counsel Robert Kravitz.